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From: Gordon Austin
Found this on the web - is this still possible?
Diverting (Investment) Income into Family Trusts without Moving Assets
You will often be presented with a client who has successfully built up a portfolio of investments over a long period of time. These investments might include real property which, during the course of time, have become positively geared.
Little regard may have been paid to tax planning in the early days of ownership of the assets, or in an attempt to negatively gear, the assets have been held in the individual's own name. Unfortunately, now that the assets are positively geared, the individual, usually the highest income earner in the family, is the recipient of all the income and cannot take advantage of the "income splitting" benefits of a family trust.
The obvious solution is to transfer the assets from the individual and into a family trust. However, the capital gains tax and stamp duty consequences of such a course of action usually make this an expensive and therefore unrealistic option.
All is not lost. There is a mechanism whereby income (i.e. rent) from real property can be transferred from an individual to a family trust without transferring the property into the trust (i.e. without incurring capital gains tax, stamp duty or invoking the assignment of income provisions of section 102 of the Income Tax Assessment Act). This mechanism is known as a "Concurrent Lease" and is a relatively low cost method of transferring net income into a family trust in order to "cash in" on the commercial and tax advantages of a trust.
Found this on the web - is this still possible?
Diverting (Investment) Income into Family Trusts without Moving Assets
You will often be presented with a client who has successfully built up a portfolio of investments over a long period of time. These investments might include real property which, during the course of time, have become positively geared.
Little regard may have been paid to tax planning in the early days of ownership of the assets, or in an attempt to negatively gear, the assets have been held in the individual's own name. Unfortunately, now that the assets are positively geared, the individual, usually the highest income earner in the family, is the recipient of all the income and cannot take advantage of the "income splitting" benefits of a family trust.
The obvious solution is to transfer the assets from the individual and into a family trust. However, the capital gains tax and stamp duty consequences of such a course of action usually make this an expensive and therefore unrealistic option.
All is not lost. There is a mechanism whereby income (i.e. rent) from real property can be transferred from an individual to a family trust without transferring the property into the trust (i.e. without incurring capital gains tax, stamp duty or invoking the assignment of income provisions of section 102 of the Income Tax Assessment Act). This mechanism is known as a "Concurrent Lease" and is a relatively low cost method of transferring net income into a family trust in order to "cash in" on the commercial and tax advantages of a trust.
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